Natick: Judge sides with Total Wine & More in pricing dispute

BOSTON - A Suffolk Superior Court judge has sided with a Natick big box liquor dealer in a legal dispute over minimum pricing.

Associate Justice Robert Gordon found faults with the state Alcoholic Beverages Control Commission pricing rule that prohibits retailers from selling alcohol for less than its invoiced cost. He overturned a commission decision suspending Total Wine & More's liquor licenses at its Natick and Everett stores.

Both stores faced multi-day license suspensions after the commission found that the company priced alcohol below invoiced cost. Total Wine & More argued it priced the liquor based on anticipated discounts from its suppliers for purchasing certain amounts of product. The commission said that violates its rules because the initial invoices do not show that discount. Total Wine & More appealed the decision in Suffolk Superior Court.

Gordon took issue in a Monday ruling with the commission limiting invoiced cost to what is on the initial invoice.

That “bears no rational relationship to the legislative policy of prohibiting anti-competitive pricing practices,” Gordon wrote.

This is not a case of predatory pricing. Instead, it is an effort by Total Wine & More to pass on to customers savings it receives for buying certain quantities of product, he wrote.

"This is something the law should promote rather than punish,” Gordon wrote.

He questioned a commission position on the discounts that could actually hurt small retailers who cannot afford to stockpile product until they receive the discount.

The commission can have regulations that seek to prohibit anti-competitive pricing and require documentation of costs on invoices, he wrote.

Total Wine & More only applied the discounts to its retail pricing once it knew it purchased sufficient product to earn the discount. The company maintained regular contact with its suppliers about the discounts, which are typically passed on to the store at the end of a promotional period, Gordon wrote.

In a statement, Total Wine & More praised the decision as "a victory for consumers and a validation of Total Wine & More’s commitment to lawfully provide consumers access to the best values possible on the products we carry Massachusetts. We agree wholeheartedly with the court’s conclusion that the law should 'promote' practices that provide better value to consumers, rather than punish retailers like Total Wine who, consistent with the letter of the law, choose to provide product value, selection and service to Massachusetts consumers."

The company hopes the decision and a campaign about alcohol rules will "provide a platform for further discussion with key decision-makers and industry participants in Massachusetts to modernize Massachusetts laws and further the interests of everyday consumers," the statement said.

Some local liquor store owners have worried about the case, in part because invoice pricing is a key point of equity between larger stores and locally owned businesses.

The commission is still reviewing Gordon's decision, a spokeswoman said.

Total Wine & More also has Massachusetts stores in Shrewsbury and Danvers.

Brian Benson can be reached at 508-626-3964 or bbenson@wickedlocal.com Follow him on Twitter @bbensonmwdn.